Precious Metal Markets Stabilise as Risk Assets Falter

Precious metal markets continued to trade within established ranges over the past five trading days, with gold, last trading at USD $4,076 per troy ounce (oz), down just over 1% for the week.

Silver has pulled back further, having fallen just over 3.5% to USD $50.50oz, though this comes off the back of a +8% move last week, with the precious metal still holding critical support above the significant USD $50oz price point.

The moves in metal markets are not unexpected given broader market developments, with equities also softer (the S&P 500 is -1.4% this past week), while the crypto space is seeing a more significant washout, with Bitcoin (BTC) -10% in the past week, having now fallen back toward USD $85,000 per coin, officially entering a bear market this week after declining more than 20% from its recent peak.

The pullback in cryptocurrency has now seen BTC enter negative territory year to date, with gold now decisively breaking out vs BTC as per this chart below, which was shared by analysts at thedailygold.com in a recent market update. 

While we have long thought the comparisons between gold and BTC make little sense given how fundamentally different the two assets are, there is no doubt some investors oscillate between the two or allocate capital across both.

As we head toward the Christmas period and then into 2026, gold does look the safer, and potentially more rewarding of the two, with the precious metal set to be supported by:

• Continued central bank buying

• Rising investors allocations in developed markets

• Continued support in key physical markets across Asia, the sub-continent, and the Middle East

This is not to say that the current period of consolidation across precious metal markets is over, or indeed that we may not see further weakness short-term.

Sentiment is arguably still too bullish, with banks from UBS to JP Morgan forecasting that they expect to see the gold price rise toward USD $5,000 in the coming year.

That may well prove true, but markets rarely make it easy for investors, especially ones that are unduly influenced by short-term price fluctuations and media frenzies.

Those investors are more likely to be trading gold and silver using derivative or financial product proxies like ETFs and CFDs, which will continue to exacerbate volatility, both to the downside in corrective periods, but to the upside as well as the secular bull market continues to unfold.

Physical bullion buyers, including clients at ABC Bullion are continuing to accumulate at current levels, and will likely take advantage of any short-term weakness in the market.

Most are taking a strategic multi-year approach to their precious metal holdings, choosing to look through the noise of day-to-day price movements, and instead focusing on the long-term bull market and unique wealth protecting qualities that bullion continues to offer.

This has been a rewarding approach for the past 25 years. There seems little reason to change course.

Thank you for choosing ABC Bullion.

Jordan Eliseo
General Manager, ABC Bullion

Luke Tyler
Market and Business Analyst, ABC Bullion

^{Disclaimer: This document has been prepared by Australian Bullion Company (NSW) Pty Limited (ABN 82 002 858 602) (ABC). The information contained in this document or internet related link (collectively, Document) is of a general nature and is provided for information purposes only. It is not intended to constitute advice, nor to influence any person in making a decision in relation to any precious metal or related product. To the extent that any advice is provided in this Document, it is general advice only and has been prepared without taking into account your objectives, financial situation or needs (your Personal Circumstances). Before acting on any such general advice, we recommend that you obtain professional advice and consider the appropriateness of the advice having regard to your Personal Circumstances. If the advice relates to the acquisition, or possible acquisition of any precious metal or related product, you should obtain independent professional advice before making any decision about whether to acquire it. Although the information and opinions contained in this document are based on sources, we believe to be reliable, to the extent permitted by law, ABC and its associated entities do not warrant, represent or guarantee, expressly or impliedly, that the information contained in this document is accurate, complete, reliable or current. The information is subject to change without notice, and we are under no obligation to update it. Past performance is not a reliable indicator of future performance. If you intend to rely on the information, you should independently verify and assess the accuracy and completeness and obtain professional advice regarding its suitability for your Personal Circumstances. To the extent possible, ABC, its associated entities, and any of its or their officers, employees and agents accepts no liability for any loss or damage relating to any use or reliance on the information in this document. It is intended for the use of ABC clients and may not be distributed or reproduced without consent. © Australian Bullion Company (NSW) Pty Limited 2020.}